Trump’s Tariff Policies Deepen Oil Market Instability, Threaten Nigeria’s Petroleum Revenue

Nigeria’s economic stability is increasingly under threat due to ongoing global oil market instability, according to Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Speaking at the Meet-the-Press briefing held by the Presidential Communications Team at Aso Rock Villa, Abuja, Ahmed warned that although falling fuel prices may benefit Nigerian consumers in the short term, the broader impact on national revenue is severe.

“As consumers, we may welcome the drop in fuel prices, but as a country that depends heavily on oil exports, it poses a serious threat to our income stream,” he said.

The NMDPRA boss highlighted the broader economic implications of fluctuating global oil prices, citing the unpredictability in American trade policies as a key factor. He specifically pointed to former U.S. President Donald Trump’s tariff strategies, many of which targeted China and other major economies, as causes of instability.

These policy swings, Ahmed noted, have disrupted global supply chains and market confidence, contributing to volatile commodity pricing, particularly in the crude oil sector.

“Inconsistencies in U.S. policy direction, especially regarding tariffs and waivers, have made it extremely difficult for traders and investors to plan. Some resort to daily trading to mitigate risks,” he explained.

Ahmed cited a specific instance when crude oil prices plummeted from $73 to $60 per barrel in just one day, illustrating how quickly Nigeria’s revenue can be destabilized. With the country’s daily production now hovering around 1.4 million barrels, according to recent OPEC data, the financial implications of such price drops are significant.

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While lower fuel costs are a relief for consumers, the situation paints a bleak picture for government revenue. “Each $10 drop in crude oil price affects our national income, reserves, and the strength of the naira,” Ahmed added.

Despite external challenges, the local petroleum sector has seen some progress. The NMDPRA chief revealed that Nigeria has significantly reduced its dependence on imported Premium Motor Spirit (PMS), with imports falling from 44.6 million litres per day in August 2024 to 14.7 million litres by mid-April 2025—a 67% decrease.

This drop in imports coincides with a sharp increase in domestic production. Local refineries, including modular plants and the Port Harcourt Refining Company (which began phased operations in November), have scaled output from 3.4 million litres per day in September to 26.2 million litres per day in April.

“Local supply is improving. From contributing almost nothing last year, domestic refineries are now supplying significant volumes, reducing our dependence on imports,” Ahmed noted.

However, despite this growth, combined supply has only surpassed the government’s 50 million litres daily consumption benchmark twice—in November (56 ML) and February (52.3 ML). Supply dipped to 51.5 ML in March and fell further to 40.9 ML in the first half of April.

In terms of supply sources, Oil Marketing Companies (OMCs) have maintained dominance, accounting for 55–60% of PMS supply. Their imports grew from 22 million litres per day in October 2024 to 30 million litres in December, stabilizing in the mid-20s range.

The Dangote Refinery also ramped up delivery from 10 million litres per day in October to 22 million litres in early 2025, before slightly declining to 18 million litres by mid-April. Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) saw its supply drop from 24 million litres per day in October to none after February.

According to Ahmed, import licenses are granted strictly based on the nation’s supply needs. He also noted that Nigeria currently has 10 active refineries, six privately owned and four publicly owned, producing a combined 1.12 million barrels per day.

Ahmed warned that Nigeria must brace for continued instability in the global oil market. He emphasized the need for proactive measures and flexible strategies to cushion the economy from the adverse effects of international policy shifts and pricing volatility.

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